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A 1930s Brookfield bungalow with views to Mauao has been deemed ''uninhabitable'' by the Tauranga City Council and will not be rented out.

The empty house, which sits on a large site behind the council's Brookfield pensioner village, was the centre of controversy last year when the council was challenged on why it was untenanted while people were homeless.

Property projects team leader Paul Muller said this week that the council had decided not to tenant the house and was now looking at options for the house and the land.

Mr Muller said the house was uninhabitable and needed more significant repairs than just a new hot water cylinder.

''There was mould, the electrical system was old and needed rewiring and the kitchen needed considerable work," he said. "Making the repairs would incur a significant cost."

The house was only accessible through the nearby village and had sat empty for about 18 months, with nearby resident Rusty Kane unhappy that the situation looked like it would now drag out for even longer.

''It sounds like a lot of building issues but you see that with any old house," he said. "It is not acceptable to have a sound house sitting empty.''

Mr Kane said that, instead of mucking around, the council could have fixed the problems and recovered the costs from rent. ''A family with nowhere to live would have been grateful.''

He said the council did not want tenants in the house while it decided what to do with the land.

Mr Kane suspected the council would be unable to sell the property to a developer because the only access was through the village, which left the option of extending the village on to the site.

It was reported in June last year that the investigation into how much it would cost to bring the house up to standard was part of a wider inquiry into whether the land could be put to better use.

The council said, at the time, that possible long-term future uses of the land would need to ensure that the operation of the village was not compromised.

Mr Muller was asked by the Bay of Plenty Times to be more specific about the options for the land, including the removal of the house for a development once the issue of access was sorted, or to extend the village,

He responded: ''We are unable to provide more information as negotiations are still ongoing around the future use of the space to provide the greatest benefit to the community. Extension of the elder house units could well be an option.''

Previous options considered for the property

2009: Use sale proceeds from former Clarke St village to build seven new units2008: Affordable housing application by Tauranga Community HousingLand area: About 2000 sq m